Contractors Hot Line is part of the Catalyst Communications Network publication family.
Contractors Hot Line is part of the Catalyst Communications Network publication family.
In March, ABC's Construction Backlog Indicator experienced a rebound, climbing to 8.2 months from February's 8.1 months, as per ABC's member survey conducted from March 20 to April 3. This marks a decrease of 0.5 months compared to March 2023.
“Given headwinds such as high borrowing costs, emerging supply chain issues, project financing challenges and labor shortages, the persistent optimism among nonresidential construction contractors is astonishing,” said ABC Chief Economist Anirban Basu. “Last month, contractors reported rising backlog and greater conviction regarding likely growth in sales, employment and profit margins.
While the backlog has declined over the past year in most regions, the middle states stand out with the second-largest backlog. Despite a significant decrease over the past year, the South maintains the largest backlog.
Additionally, ABC's Construction Confidence Index witnessed improvements in sales, profit margins, and staffing levels in March, all exceeding the 50 threshold, signaling expectations for growth over the next six months.
“While certain readings are below year-ago levels, there was broad-based improvement in March,” said Basu. “For instance, in the category of profit margins, 32% of those surveyed in February expected improvement over the next six months. That share rose to nearly 34% in March, with only 24% hinting at near-term margin compression. That indicates that though costs of delivering construction services continue to rise, contractors collectively enjoy enough pricing power to support stable to rising margins. If interest rates begin to decline during the summer as is widely expected, confidence is likely to climb further.”